Mark & Sarah: Supporting complex residential lending

Who did we help?

Mark and Sarah are experienced property professionals based in the North West. Through their careers, they have built extensive knowledge of residential renovation projects and own a successful limited company providing chartered surveying services which has a strong track record of growth.

What did they need?

The couple identified a unique property opportunity in a substantial dwelling that had been divided into three separate flats. They wanted to restore the building to its original layout and create a large family home. Whilst three individual homes, they remained on a single title so the legal aspect of the purchase would be straightforward.

Drawing on their industry expertise, they had prepared a comprehensive package of documents including architectural drawings, a detailed schedule of works plus a full cost analysis, demonstrating the viability of the project. 

Mark and Sarah’s deposit was made up of a combination of existing equity, a family gift and funds drawn from their limited company through dividends.

Why were they facing challenges?

The application included a number of elements that meant the majority of mainstream lenders were unable to help. 

As well as purchasing a property requiring significant renovation, Mark was retaining his existing family home, where his former partner and children continue to live, meaning the new purchase would technically be a second home.

In addition, Sarah had a historic large default on her credit history, linked to a dispute over a car finance balloon payment. Although the balance had been repaid more than three years earlier, it remained outside the appetite of many lenders.

The applicants were also using dividend income from their limited company as part of the transaction, requiring confidence that the withdrawal of funds would not negatively affect the ongoing health of the business.

How did we help?

Our manual underwriting approach allowed us to look at the application as a whole rather than relying solely on automated criteria. The applicants' industry experience, together with their detailed plans and costs, gave us confidence in the proposed conversion. We were also able to review the financial position of their limited company, which showed consistent year-on-year growth in turnover, profit before tax and shareholder funds.

Working alongside the applicants' broker and accountant, we established that the dividend payment used towards the deposit would not have a detrimental impact on the business, while the historic default had been satisfied for more than three years and fell within our lending policy.

Taking all of these factors into account, we were pleased to support the application, agreeing an 80% loan-to-value mortgage and helping the clients secure a property with the potential to become their long-term family home.

If you have a client with a complex residential case that falls outside standard lending criteria, our Furness Intermediaries team may be able to help. Call us on 0800 988 1561 or speak to one of our Business Development Managers.